When Ronald Reagan ran for president in 1980, his opponents scoffed at his proposal to lower taxes, calling the possible results as “Trickle Down Economics” (a/k/a Reaganomics). They said it was a worthless economic policy. Was it?
In theory, TDE is an economic system where there is no significant barrier to accumulation of wealth by individuals. If the rich do well, as the theory goes, benefits will “trickle down” to the rest of the people. Lower taxes on high income earners or capital gains will benefit not only the rich but everybody on the lower income rungs, is how that theory is supposed to work. Reagan's critics had to “eat crow” as the economy boomed after the Reagan tax cuts kicked in. The resulting prosperity lasted more than 25 years. Yes, the rich got richer, but so did the poor and middle-class, “a rising tide lifted all boats”, as Jack Kennedy once opined. The economy was booming during the late 80s and 90s as a result of Reagan's “Trickle Down Economics”.
